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How F500 Manufacturer will Reduce Cost of Managing Suppliers by Implementing WIN(win)

The Watchlist feature of WIN(win) enables organizations to manage suppliers by tracking clauses in contracts that can lead to problems in the future. By using the Watchlist feature, you can cut down on cost that you would have incurred should such clauses come into effect. This Manufacturer found itself in a tricky situation when a sales clause eroded benefits accrued from their initial contract with SAP-Deloitte.

About The Company

The Manufacturer is a company specializing in the production of motorcycles. The company's signature bikes are famous worldwide. To meet the demand of their motorcycles and lower the cost of production, they focus only on their core business and outsource other processes.

About SAP-Deloitte

SAP-Deloitte is a collaboration of two giants: SAP and Deloitte. SAP is a market leader in the production of business software. Their software is used by numerous organizations globally to streamline their business process. Deloitte is an authority in business processes, providing auditing, consultations, financial advisory, risk management and tax services.

Background

The company, in its effort to streamline operations, went in search for a CRM solution. The supplier of choice was SAP-Deloitte, owing to their reputation. The company also engaged NET(net), a sister company to WIN(win), to handle the negotiations between them and the supplier. This was a good first step as they were able to optimize terms and incorporate greater accountability into the contract.

The Problem

A year down the line, SAP-Deloitte (the supplier) decided to sell off the use of their CRM module to the manufacturer (the buyer). The price quoted was favorable and The Company went ahead with the purchase. However, there was a catch; by agreeing to purchase the CRM, The Company was forfeiting maintenance and support from the supplier included in the initial contract. This meant that after the purchase, The Company would have to pay for maintenance and support from SAP-Deloitte because it evoked a clause in the agreement. This meant that they would have to spend more to pay the supplier.

The Solution

WIN(win) keeps watch on such slippery clauses in contracts, thus safeguarding the interest of both parties. The Company called NET(net)/WIN(win) to implement a system that will manage its suppliers. The WIN(win) Solution could not salvage the situation with SAP-Deloitte but was effective in protecting The Company in future contracts with suppliers.

WIN(win) flags potential trouble points in a contract and alerts the buyer to review it. During the SAP-Deloitte deal, The Company had to pay up to six times what was in the original contract to get maintenance and support from the supplier. However, going forward, they are protected from such clauses by WIN(win) implemented by the NET(net) team, which can pick them up early enough for reviews.

Buyer-seller negotiations can result in some benefits being included in the contract. This was the case when The Company engaged SAP-Deloitte for a CRM contract. However, the sale clause eroded the benefits in the initial contract. When WIN(win) is implemented, it takes care of this aspect, making sure that the benefits agreed upon in the initial contract are valid - and not eroded by new clauses.

The cost of engaging WIN(win) is lower than the cost you will incur when you have to renegotiate with a supplier.

Impact:

One Year subscription to WIN(win) $18,000 USD
One Year of higher maintenance and support    $120,000 USD
Benefit $102,000 USD

 

 

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